University of Adelaide's Professor John Spoehr has taken the union movement's claim of 50,000 lost jobs from Holden closing and multiplied it to get "hundreds of thousands" of jobs. Bill Shorten has let the hyperbole run right away with him, claiming "the shockwaves of this economic tsunami are unprecedented".

It's no surprise Shorten has a degree in law, not history or economics.

And then there's Victorian Premier Denis Napthine saying he was extremely disappointed by "the suddenness" of Toyota's decision. Apparently he's of the "Pussy's on the roof and won't come down" school of bad news, if you know the old joke.

Inevitable end

For reasons spelt out in the Productivity Commission's position paper, the end of making cars in a small, expensive market was inevitable. Contrary to the knee-jerk reaction, much of it politically motivated, the PC's cooler heads found "there is no compelling evidence that spillover and multiplier benefits (of ceasing production) exceed the costs of assistance to the industry".

And "decades of transitional assistance have forestalled but not prevented the structural adjustment now being faced by the industry" while "assistance imposes costs on the community and dulls incentives to improve productivity, seek export opportunities, and diversify into other industries".

There is no denying the pain of those in the front line of restructuring, those losing well-paid jobs they've often enjoyed for many years.

It's our ability to adapt that sets us apart, that has put us at the top of the food chain.

Parts suppliers have three years' notice of the need to diversify into other areas of manufacturing.

The smart ones have already been doing that as they could read the writing on the windscreen.

Not all will be able to adapt and diversify. Money and long histories will be lost. But that doesn't add up to a recession.

The government is correct to point out that many thousands of jobs are always being lost and many thousands more are always being created.

New jobs

In some ways, the automotive workers are lucky because they are on the right side of Pascoe's Law of Disaster: "If your house burns down, hope that all the others in your street do too."

There will be retraining packages and special assistance offered that will add up to nine figures – that doesn't happen for the workers in the average small-to-medium company that closes.

The reality is that we don't know what new jobs will be created over the next several years – we never have known, but they've come anyway.

The Doomsday forecasters tend to assume that everything else will remain exactly the same, when it does not.

But fear has always been a good way to sell a story for the tabloid media.

The reality is much more likely to be in line with what I think is the best piece written on the industry in recent years, Peter Hartcher's effort back in May, way back when Opposition Leader Tony Abbott was being quoted as saying "above all else, without a motor industry (this) is not an Australia that makes things any more and is not a first class economy".

Oh well, apparently opposition leaders have a tendency to talk our country down.

Cheaper cars

By the way, a sidelight to the end of manufacturing here would be the possibility of opening up the Australian market to the rich possibilities of grey imports, as New Zealand did when it dropped protecting inefficient motor vehicles.

There are plenty of grey imports occurring at the very top end of the market, but allowing the masses into the game would face a huge lobbying war by car importers, many of whom currently enjoy spectacular margins on their Australian sales.

Compare the price of a BMW or Mercedes here and in their country of origin.

My guess is that the importers' lobbying will be successful again, as it was in killing the previous government's FBT reforms.